HUMA Committee Report

The Canadian economy is experiencing a relatively prolonged period of economic strength. In 2007, the national unemployment rate was 6%, the lowest it has been in more than 30 years. Although the downward trend in the unemployment rate is a positive development overall, many employers, especially small- and medium-sized employers in Western Canada, are experiencing growing difficulty in finding workers with the skills they need to maintain and expand their operations. At the same time, Canada has more than one million unemployed people, many of whom are searching for full-time jobs. Unfortunately, many of these individuals lack the necessary skills to fill available jobs or are geographically separated from job opportunities.

Forgoing economic opportunities for want of workers with the right skills lowers output, productivity and the incomes of Canadians. Although the incidence of skills shortages normally intensifies during tight labour market conditions, we suspect that another contributing factor is a fast approaching and unstoppable demographic trend: the aging of Canada’s labour force. Many expect this development to exacerbate the skills shortages problem in the years to come as Canada enters a prolonged period of slower growth in the labour force.

The capacity of the Canadian economy to produce goods and services depends on a number of factors, including the supply of workers, workers’ skills, hours of work, the amount of capital used in production, and technology. The supply and quality of workers’ skills are key contributors to our competitiveness and economic prosperity. As technology improves, so must the skills of workers using it; education and training are becoming increasingly important contributors to improved productivity, and our policies to increase the level and quality of human capital in this country must continue to move toward this reality.

The skill requirements of today’s jobs are higher than those of the past, and the skill intensity of occupational demand is expected to continue rising in the years to come. Today, it is estimated that more than 70% of all new jobs created in Canada require at least some post-secondary education and training. Yet, more than one-third of the Canadian labour force cannot meet this requirement. An even higher proportion of working-age Canadians lack the necessary literacy and other essential skills to participate successfully in our rapidly changing labour market.

The return on investments in education and training in Canada accrue not only to those investing in skills, but to society as a whole. There is an important role for the public sector to play in facilitating individuals’ acquisition of the skills they require in the workplace. Workers, unions and employers also play key roles in ensuring that the necessary investments in human capital are made. Canada’s labour market is national in scope, and so all levels of government must work together to ensure that workers have the right skills to meet Canada’s future needs and are able to move freely to accept available jobs. We need to develop a more effective pan-Canadian employability strategy based on co-operation, collaboration and inclusion to meet the challenges of slower labour force growth and the prospect of growing skills shortages in the years ahead.

Education, training and many other matters related to Canadian workplaces are areas of responsibility that fall primarily within the purview of provincial and territorial governments. Members of the Committee respect this reality, but most of us also recognize that there is an important role to be played by the federal government in working with the provinces and territories to create adaptable and knowledge-based workforces in every region of the country.

The federal government has an important role to play in helping promote the unfettered movement of workers throughout Canada. Too often, workers with the right skills in one region of the country are unable to fill vacant jobs in another region because we lack adequate interprovincial/territorial mechanisms for the recognition of workers’ skills. This is a serious and long-standing problem.

Increasing Canada’s supply of skilled workers is important not only for economic prosperity, but also to improve the socio-economic situation of individuals whose participation in the workplace is low. With the right skills and anticipated growth in employment opportunities, the future job prospects of Canadians — especially those in under-represented groups — are expected to improve, provided we continue to develop and implement policies that support greater participation in the workplace.

On May 11, 2006, the House of Commons Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities agreed to undertake an examination of employability issues in Canada. The Committee examined a myriad of labour supply-side issues such as worker mobility, seasonal workers, older workers, skilled worker shortages, workplace literacy and the recognition of foreign credentials. Although the initial study was designed to focus on these issues, the study’s scope was quickly broadened to include Aboriginal workers, workers with disabilities, low-income workers, newly arrived immigrants and temporary foreign workers.

There are essentially four ways to ensure that Canada’s supply of skilled workers is sufficient to meet employers’ needs and thereby mitigate what many expect will be a chronic and worsening skills shortages problem in the future. Our report is structured accordingly. One way to mitigate the impact of skills shortages is to ensure that the Canadian labour market is able to adjust quickly and that workers’ skills are utilized in their most productive capacity. Chapter 1 focuses on the need to: broaden human resources planning to better anticipate which skills will be in greatest demand and how this demand can be met; reduce barriers to worker mobility; and provide for greater recognition of Canadian and foreign-born workers’ formal education, skills, occupation-related credentials and prior learning.

Chapter 2 focuses on investments in human capital. We discuss issues related to workplace training, post-secondary education, lifelong learning and federally supported skill acquisition initiatives directed primarily at unemployed individuals.

Another way to augment the supply of skills is to intensify the use of existing skills among under-represented segments of the labour force. Chapter 3 examines ways to retain the services of older workers, increase the participation and employment rates among Aboriginal people and persons with disabilities, reduce work disincentives among low-income workers and extend the working season of those employed in seasonal industries.

Finally, the supply of skills can also be increased by attracting individuals from other countries. Canada’s immigration program has a long history of attracting foreign applicants to meet our labour market needs. In Chapter 4 we discuss issues surrounding the selection of skilled workers seeking permanent residency in Canada, the admission of temporary foreign workers to meet specific sectoral and geographical skill needs, and the integration of immigrants into the Canadian labour market.

It is our intent that the recommendations in this report will contribute to the development of an effective pan-Canadian employability strategy that will, in the years ahead, meet the labour market needs of employers and of all segments of the working-age population, particularly those with low skills, low incomes and low workforce participation rates. Members of the Committee realize that the development of a pan-Canadian employability strategy will require an ongoing commitment and greater cooperation between federal, provincial and territorial governments. Although some of the recommendations in our report may fall within the purview of provincial/territorial responsibility, this should not be construed as an attempt to extend the reach of the federal government into areas of provincial/territorial jurisdiction. Rather, we simply believe that there is a need for federal leadership in areas of national importance. We recognize the importance of obtaining provincial/territorial consent before taking action, and believe that in the spirit of greater cooperation between both levels of government we can work together to help ensure the future prosperity of Canadians.